Simplifund Litigation: 5 Reasons Default Judgment Is the Real Risk

Default judgment happens when your business does not properly defend its case. Whether your business owes the money or not, the way to handle the case is simple: Defend the lawsuit. That is because the real risk is default judgment.

It’s common to be furious when served with a lawsuit. You might think, “this is all a pack of lies!” or “they’re bluffing,” or “they’re so wrong that I don’t even have to respond.”

Maybe you think, “If I tell the person why they’re wrong, maybe we can still work this out.” But the plaintiff has already hired a lawyer, paid court costs, and served you.

1. They win without you

In any lawsuit, if the defendant (here, you) does not appear, the plaintiff wins by default. Default judgments give them a court order to collect a debt they say you owe. If you do not properly defend the case, you are not going to get to tell the court about how the bill is overstated, or how you already paid them. If you don’t appear to fight back, no matter how accurate or inaccurate the complaint is, the information it contains will be taken as true by the court.

One way to get a default judgment is for the plaintiff to ask the clerk for a default judgment. This kind of judgment is allowed only if the debt is for a set amount of money. If the plaintiff has a claim for an amount of money that cannot be calculated, the plaintiff can’t get a default judgment by asking the clerk. Instead, they have to go in front of the judge. That hearing will happen without you.

I did a search of New York court records, and found none with the name “Simplifund”. I did find a company called Simply Funding LLC, a New York based funder. They have sued businesses in New York State Supreme Court. In one case, the defendants had moved to vacate a default judgment. That judgment was entered August 4, 2025.

2. The clock runs quietly

Default judgments can happen without you being aware of a lawsuit. If a process server hands you a copy in New York, you have 20 days to appear in the action. If the summons was served on you in some other way, including substituted service or through the Secretary of State, then you have 30 days after the service is complete.

For a corporation, when the Secretary of State is served, your service is complete. This is true even if you never actually receive the lawsuit. The plaintiff must also send an extra copy to your last known address. That copy has to be mailed at least 20 days before the judgment.

3. Collection starts fast

Once they have the judgment, the plaintiff can begin collections by enforcing it. A restraining notice served on your bank can freeze your account for as long as one year, and the bank can hold as much as double the amount of the judgment. In addition, if you are a personal guarantor, the creditor can start taking up to 10% of your gross pay.

After the lawsuit is over, the plaintiff has a legal right to send you questions under oath that may help the creditor locate money to collect. The creditor may also send garnishment questions to anyone who owes you money, including your bank, Venmo, PayPal, or any tenant who rents from you.

The creditor can get an order from the court to start taking your things. Personal property like your office contents and the vehicles you use for your business may be sold by the sheriff. If you are owed rent or payments that someone else owes you, that income can be used to satisfy the judgment. Even the ownership interest in your business can be seized and sold.

4. It lasts and grows

In New York, a judgment that is more than 20 years old is presumed paid. But any payment you make, even partial, or any signed admission of the debt restarts the 20-year clock. Meanwhile, a business judgment in New York gets 9% interest a year, unlike the 2% consumer debt rate.

Once your business defaults, not only does the judgment become a lien on any real estate you own in the county, it can make it hard to sell or refinance. That means you will probably not be able to get a mortgage or get title insurance. The lien jumps ahead of your mortgage. It could also damage your credit rating.

5. Undoing it costs more

Once a default judgment is entered, you can still try to undo it by making a motion to vacate the judgment. However, your business must act quickly. You can bring a motion to vacate a default judgment within one year after the plaintiff served the judgment and notice of entry of the judgment, or within one year after you learned of the entry of judgment if you were never personally served, up to a maximum of five years after the judgment was entered. It also has to be shown that you have a defense with some good reason to it. There is no guarantee you will succeed with such a motion.

You may also be able to get the court to strike the default, if the judgment papers have a clear mistake. If you think you have been improperly served, you might be able to either have the court re-open the case, or have the judgment struck from the record. If you succeed, the case would go on as though no default judgment had ever happened. You can then file an answer.

And once you have lost by default, it costs you and your attorney time and money to fight it. While it may be possible to vacate a default judgment, you can avoid these steps by simply answering the complaint in time.

If you have been served with the lawsuit, you should check the date of service on the papers and the date you must respond. Find a lawyer as soon as possible to help you defend the case. Gather any agreements and emails with the plaintiff, and your financial records on your dealings with them. Even if they have the judgment, don’t give up. It may not be too late. You may be able to settle the lawsuit, including paying the judgment, and work out repayment terms that are realistic for you.

If the deadline has already passed, the best thing to do is to call a lawyer. If you settle the judgment, make sure that the plaintiff has filed a satisfaction of judgment with the court. Check with the clerk’s office to make sure the judgment has been satisfied.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.